04:23 PM EDT, 10/23/2024 (MT Newswires) -- The Toronto Stock Exchange closed lower for a third-straight day on Wednesday as investors continue to take profits following last week's record high as commodity prices weakened and the Bank of Canada followed through on expectations to lower interest rates by 50 basis points.

The S&P/TSX Composite Index closed down 149.31 points to end at 24,567.39 points. Base Metals and Information Technology, down 1.78% and 1.2% respectively, were the biggest decliners. Declining issues outpaced gainers 1,420 to 418, with 178 issues closing unchanged.

West Texas Intermediate (WTI) crude oil closed lower on Wednesday following two days of gains after a report showed a larger than expected rise in U.S. inventories last week and the dollar strengthened. WTI crude for December delivery closed down US$0.97 to settle at US$70.77 per barrel, while December Brent crude, the global benchmark, was last seen down US$1.03 to US$75.01.

Gold fell off a record high mid-afternoon on Wednesday as the dollar rose to a near three-month high and treasury yields rose. Gold for December delivery was last seen down US$29.70 to US$2,730.10 per ounce after five rising sessions that pushed the price of the precious metal to its highest ever.

The Bank of Canada on Wednesday made its latest rate-cut decision and issued its Monetary Policy Report, its economic forecast update. Derek Holt, Head of Capital Markets Economics at Scotiabank, said in a note that following the 50 basis point (bp) cut may be tempted to make another outsized rate cut with the size and pace to be determined by data and other developments.

While Holt said the BoC's actions met Scotiabank's expectations, they left intact Scotia's views on the longer run risks the BoC may be courting should rapid policy easing continue, "Key is that the projections left growth and inflation unchanged despite picking up the pace of easing. That may indicate a BoC bias that greater downside risk to the economy would have persisted in the absence of additional easing that would otherwise have faced slightly firmer growth on signs that monetary easing is accelerating."

Holt noted market pricing for the next decision on December 11 remains on the fence between a quarter- and 50-point cut. He also noted terminal pricing remains at 2.75-3% by summer.

Meanwhile, RBC jn a note said: "The output gap has been the BoC's historical compass (pre-pandemic) but it took a back seat during the period of high and sticky inflation. Now that the BoC thinks we are back to low inflation and risks balanced, amid persistent and large excess supply, growth should continue to be the primary factor influencing the size of rate cuts. Put another way, low inflation with balanced risks and a large output gap means that policy should already be in accommodative territory (arguably they are behind the curve)."

In another point, RBC said although near-term growth forecasts have been downgraded, they still represent "relatively high bars to reach." For context, the BoC expects Q3 growth at 1.5% and Q4 at 2% vs RBC Economics at 1% for both. The BoC has Q4 headline CPI at 2.1% year over year and core (average of trim/median) at 2.3%. Given the starting point (September headline inflation of 1.6% and core near 2.35%) and strong macro forces pushing inflation lower, it is unlikely CPI comes in hot versus their forecast, RBC added.